In Order for Currency to Be Widely Used as a Medium

question 188

True/False

In order for currency to be widely used as a medium of exchange, it is sufficient for the government to designate it as legal tender.

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Definitions:

EOQ Model

Economic Order Quantity Model, a formula used by businesses to determine the optimal quantity to order that minimizes total inventory costs.

Optimal Order Size

The quantity of stock that minimizes both ordering and holding costs in inventory management, often determined by the Economic Order Quantity model.

Credit Policy

A set of guidelines that a company follows to determine credit terms for customers, including payment terms, credit limits, and how to manage past-due accounts.

Short-Term Credit

A type of financing or line of credit that is designed to be repaid within a short period, typically less than one year, used for immediate cash flow needs.